The Effect of Financial Information at Underpricing Level with Auditor’s Reputation as Moderating Variables

ABSTRACT: Underpricing is a phenomenon of Initial Public Offering which is on average cheapthat would make the company not to get the maximum funds. The purpose of this study is todetermine the effect of profitability, financial leverage, price earning ratio, and proceed at the level ofunderpricing of initial public offering on the IDX with the auditor’s reputation as a moderating. Thisresearch was conducted at companies conducting IPO in 2016-2018. Total population of 99companies. Of the total population, 88 observational data were obtained using a non-probabilitysampling method with a purposive sampling technique. The data analysis technique used is moderatedregression analysis. The results of data analysis show that profitability, financial leverage, andproceed have a negative effect on the level of underpricing, while the price earning ratio has no effecton the level of underpricing. The auditor’s reputation weakens the negative effect of profitability at thelevel of underpricing, while the auditor’s reputation is unable to moderate the effect of financialleverage, price earning ratio and proceed there is a level of underpricing.

KEYWORDS : Underpricing; Initial Public Offering; Financial Information; Auditor Reputation.